Telecom Corporation of New Zealand upgraded to "overweight"

05/20/05 - Morgan Stanley

LONDON, May 20 (newratings.com) - Analysts at Morgan Stanley upgrade Telecom Corporation of New Zealand (NZT) from "equal weight" to "overweight." The target price is set to NZ$6.44.

In a research note published this morning, the analysts mention that the company is expected to return a significant amount of cash to its shareholders in the next two years. The decline in Telecom Corporation of New Zealand's share price, following the 3Q05 results and FY08 guidance, is likely to have been overdone, the analysts say. The company has proposed a dividend policy of a pay out of 75% from its net earnings, which Morgan Stanley expects to increase to 85% in the forthcoming few years.